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U.S. Vice President Mike Pence criticized China’s actions against protesters in Hong Kong while calling for greater engagement between the world’s two biggest economies, delivering a long-anticipated critique of Beijing’s human rights record as the two nations try to resolve their trade war.
“Beijing has increased its interventions in Hong Kong and engaged in actions that curtail the rights and liberties that Hong Kong’s people were guaranteed through a binding international agreement,” Pence said Thursday in a speech at the Wilson Center in Washington.
Addressing the demonstrators, Pence said: “We stand with you.”
Pence’s speech comes at a crucial time in the U.S.-China relationship as the two countries remain locked in a trade war and jostle for military and commercial dominance in the Pacific. White House officials have debated for weeks how critical Pence should be, underscoring the stakes of his remarks, which come just a day before negotiators talk about progress toward agreeing on a phase one agreement over trade.
The vice president was careful to balance his criticism with an olive branch. Rather than “decoupling” the two countries, the U.S. “seeks engagement with China and China’s engagement with the wider world,” he said. “Despite the great power competition that is underway and America’s growing strength, we want better for China.”
Pence’s most stinging criticism of China was indirect, in remarks targeting Nike Inc (NYSE:NKE). and the NBA.
“Nike promotes itself as a so-called ‘social-justice champion,’ but when it comes to Hong Kong, it prefers checking its social conscience at the door,” Pence said.
Representatives for Nike (NYSE:NKE) and the NBA didn’t respond to requests for comment.
Delayed Speech
He accused the NBA of “siding with the Chinese Communist Party and silencing free speech.” The league apologized after an executive of the Houston Rockets issued a tweet supportive of Hong Kong protesters, outraging Chinese authorities and many NBA fans in the country.
“The NBA is acting like a wholly owned subsidiary of the authoritarian regime,” Pence said.
Pence was originally supposed to deliver the speech on June 4, which marked the 30th anniversary of the Tiananmen Square (NYSE:SQ) massacre. The administration ultimately delayed the speech in the hopes that President Donald Trump would land a meeting with Chinese leader Xi Jinping at the Group of 20 leaders’ summit in Osaka later that month.
Trump is aiming to sign a limited trade deal with Xi next month, and a weakening American economy is chipping away at the U.S.’s leverage.
Meanwhile, pressure is building from Capitol Hill to stay firm, highlighting White House moves this month to sanction Chinese entities accused of connections to the surveillance and imprisonment of Muslim Uighurs in the northwestern region of Xinjiang.
National Security
Unrest in Hong Kong has underscored the heated tensions as many U.S. lawmakers are pressing for legislation to support pro-democracy protesters despite a threat of retaliation from China.
Leland Miller, chief executive officer of China Beige Book, said the administration is engaged in somewhat of a good-cop, bad-cop approach to China.
“Markets tend to assume the administration’s China policy is monolithic, swinging either hawkish or dovish based on the president’s moods, but that’s not really the case,” Miller said. “Since late August the White House has certainly turned more dovish on trade, but on the national security side, hawks continue to run the show.”
Analysts say it’s hard to predict how the Chinese will react but caution it’s unlikely that Beijing will hit back at the vice president directly, if they don’t agree with elements of the speech.
Trade Pact
Under the terms of the partial trade arrangement reached earlier this month, Chinese spending on U.S. farm goods will scale to an annual figure of $40 billion to $50 billion over two years, according to the White House. China would also agree to certain intellectual-property measures and concessions related to financial services and currency.
In exchange, the U.S. delayed a tariff increase scheduled for Oct. 15 -- to 30% from 25% on about $250 billion of Chinese imports. More duties on Chinese products, targeted for Dec. 15, haven’t yet been called off.
While the limited agreement may resolve some short-term issues, several of the thorniest disputes remain outstanding. U.S. goals in the trade war center around accusations of intellectual-property theft, forced technology transfer and complaints about Chinese industrial subsidies.
(Updates with no comment from Nike (NYSE:NKE), NBA in eighth paragraph)